MUMBAI: Investors in IndiabullsHousing Finance may have a reason to cheer when markets open next week after Care Ratings upgraded the company's subordinate or unsecured debt rating to triple-AAA on Friday late evening, a move that would reduce the company’s borrowing costs adding to profit margins.

“But, initially we would not get that much benefit as our debt capital is much less than our equity capital. But, over a period of time, we expect the borrowing costs to come down,” he said.

The company has so far raised about Rs 1,700-1,800 crore debt capital versus Rs 11,000 crore equity capital meeting the company’s business requirement for next many years. According to regulatory norms, Indiabulls can now mop up debt capital equal to the equity capital mark.

This means, the country’s second largest private housing finance company will gradually reap the benefits of rating upgrades as it plans to shore up debt capital by selling bonds.

“We are planning to raise Rs 2,000 crore this financial year via such bond-sales,” Banga said.

Rated as AA+ the company bonds could yield 9.60-9.65% earlier versus 9-9.25% expected now. This itself shows the cost differential.

This upgrade will allow IBHFL to further enhance shareholder value by maximising RoE in the long run, the company said in a release on Friday.

“With this upgrade, IBHFL enters into the league of a select few financial services companies that enjoys AAA on both senior-debt and subordinate-debt,” it said.

Indiabulls shares on Friday rose more than 1% to close at Rs 679.10 on BSE.